The Government’s JobKeeper legislative reforms have been passed in a package of Bills which include changes to the Fair Work Act 2009, and the economic and financial elements of the JobKeeper scheme.
The Fair Work Act 2009 amendments clarify employers’ abilities to stand-down employees, reduce hours, alter duties, direct annual leave be taken within the Coronavirus period.
The Full Bench of the Fair Work Commission amended 99 Awards to include unpaid pandemic leave and twice the amount of annual leave being taken at 1/2 rate of pay.
NSW Government Small Business grant of $10,000.
See details below.
1. IMPORTANT: JobKeeper changes introduced into the Fair Work Act 2009
The Fair Work Act 2009 has been amended (temporarily) to give support to the operation of the Government’s JobKeeper scheme in Australian workplaces. Its objective includes assisting Australian people keep their jobs and maintain their connection to employers during this unprecedented economic downturn and restrictions arising from the coronavirus pandemic and government initiatives designed to slow the transmission.
A new Part 6-4C applies only to employers and employees eligible for the JobKeeper scheme and has been introduced with an automatic repeal on 28 September 2020 (though a review by the Minister has been requested to be completed by 8 September 2020). The eligibility criteria remains unchanged - the Department of Treasury has updated and clarified its fact sheets which are found here and discussed in our #3 Update below.
The key points applicable to employers eligible to participate in JobKeeper scheme with respect to employees eligible to receive JobKeeper* subsidies, are:
Stand down due to business down turn and Coronavirus initiatives: A right for an employer to stand down an employee to work fewer days or reduced hours where the employee cannot usefully be employed for the employee’s normal days or hours during the JobKeeper stand down period because of business changes attributable to the Coronavirus pandemic or Government initiatives (including Commonwealth, State or Territory initiatives) to slow Coronavirus transmission and it can be implemented safely having regard to the nature and spread of Coronavirus. Such a direction may include an employee not working on particular days, working for a lesser period or working for a fewer hours than the employee would ordinarily work (including nil hours).
Note: This is an important distinction from the usual stand down provisions contained in section 524 of the Fair Work Act which should now give business greater confidence behind the reasons (and therefore lawfulness) behind their stand down direction and their requests to reduce hours.
Alternative duties or change in place of work: A right for an employer to give a direction to an employee about the nature of the employee’s duties, within their skill and competency or to perform duties at a different place of work, including the employee’s home.
Direction to take annual leave at full or half rates of pay: A right has been given for an employer to request the employee to take annual leave (at full or half pay for twice the period) which the employee must consider and cannot unreasonably refuse. In effect, the employer can direct the employee to take his or her annual leave. The employee’s annual leave quota must not be reduced below 2 weeks.
NOTE: There is some criticism that the direction to take annual leave with a JobKeeper subsidy results in the subsidy being used by employers ‘running down the clock’ on their employees’ annual leave accrual. Worth keeping an eye on- there is a mechanism for Rules (subordinate legislation) to be issued by the Minister which has been foreshadowed during debate in Parliament will be used to issue further directions on the JobKeeper’s application.
Consultation and notice: Employers are required to consult employees before issuing these directions. At least three days written notice of the intention to give a direction (or a lesser period if agreed) must be given by the employer. The employer needs to consider the employee’s views, consult the employee (or employee’s representative( and keep a written record of the consultation. The direction needs to be in writing (electronic means is acceptable). If you have already issued stand down orders to your team this consultation requirement does not apply.
Changes in work arrangements: An employer and employee can agree to work different days or different times compared with the employee’s ordinary days or times of work, despite any limitations in an employment provision to the contrary. The Government explained that this is designed to encourage flexible work arrangements being struck to support the business and ongoing employment of employees, however the employee is required to consider the employer’s request for changed work arrangements and cannot unreasonably refuse it.
No change in terms of employment/accrual of entitlements: The JobKeeper changes do not automatically modify the employee’s terms and conditions of employment. Some employers may retain employees without directing a stand down, reduction in hours or the taking of annual leave. These provisions apply only when the employer gives the JobKeeper directions. The employee’s entitlements remain the same and accrue at the same rate pre-JobKeeper direction. If an employee takes annual leave on half pay, entitlements accrue at 100% as if the direction had not been given.
Other employment & training: An employee can request permission to work in secondary employment, participate in training or engage in professional development. The employer must consider and not unreasonably refuse such requests. Consider any training policies the company has that may apply as well as any restraints, non-competes or conflicting terms in the employee’s contract of employment.
An employee is not obliged to comply with a stand down direction under this Part if it is in all the circumstances unreasonable. Unfortunately no examples been given as to what may be unreasonable, though carer’s responsibilities are relevant.
The Fair Work Commission is empowered to conciliate, mediate and arbitrate disputes under this Part including the reasonableness in which an employee refuses a request by an employer (and vice versa).
The employer cannot (even if by way of giving a stand down direction) reduce an employee’s hourly rate of pay.
An employer who fails to pass on the JobKeeper subsidy payment in full to its employee or knowingly misuses a direction will face a civil penalty of $126,000.
A JobKeeper stand down is not applicable where an employee takes paid or unpaid leave authorised by the employer. A direction given under this Part is not a redundancy. The usual redundancy provisions in the Fair Work Act remain unchanged.
*Note that casuals with less than twelve months service are excluded as are skilled visa workers.
A copy of the Bill is here and Explanatory Memorandum here.
2. The Fair Work Commission amends 99 Awards to introduce unpaid Coronavirus leave and 1/2 pay annual leave
On 8 April 2020, the Full Bench of the Fair Work Commission has amended 99 Awards to include two weeks of unpaid pandemic leave as well as a mechanism to take twice as much annual leave at half pay.
The amendment takes effect from 8 April 2020 until 30 June 2020 and expressly excludes Awards in the construction, maritime, mining and resources industries where the Full Bench noted ABS research reporting 37% of the business in the mining sector having been adversely affected compared to 78% of businesses in accommodation and food services. It is also expected the short term impact will not be felt by these industries.
The decision summary is here and a copy of the variation is here.
3. NSW Small Business Grants
On 3 April 2020 the NSW Government announced a small business grant of up to $10,000 under a new assistance scheme. The NSW Government is putting $750million into the Small Business Support Fund for support to small business impacted by Covid-19. The fund was recently created as part of the NSW Government’s bushfire relief initiative and is said to have been highly successful in getting$42mil to 4200 business in the first 10 days of launching earlier this year.
The announcement indicates it will be available to eligible businesses who:
Have between 1-19 employees and a turnover of more than $75,000;
A payroll tax threshold below the NSW Government 2019-20 payroll tax threshold of $900,000;
Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020; [Note: No indication of meaning of ‘highly impacted’]
Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice;
Provide appropriate documentation upon application. (to be confirmed what documentation they require)
The application for the grant will need to be made via services NSW, however applications are not open yet but expect to be open within the next fortnight.
For more information, the NSW Government announcements page here.